Tag Archives: Federal Tax Credit

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Updated July 1, 2010 – US Senate Passed this Bill and it is now at President Obama’s to be signed.

June 29, 2010 – US House extends Closing Deadline for First Time Homebuyer Tax Credit to 09/30/10 if they are in contract as of 04/30/10.

The homebuyer has to be in contract before 04/30/2010 and now close by 09/30/10 (instead of 06/30/10). This bill is going to the congress and is expected to pass.

This is in part due to the slow process by the lenders and loan servicers during the loan approval and loan funding process where two months escrow might not suffice to close escrow. However, I also fee the benefits to First Time Homebuyer in contract on Short Sale properties due to the notorious slowness in lender approval of short sales.

Hopefully the ones that are in contract on short sale as of 04/30/10 will also get the up to $8,000 tax credit if they close by 09/30/10. There is also the California Tax Credit of up to $10,000 which expires 12/31/10 – unlike the federal tax credit, this tax credit has to be claimed over a three year period.

In order to stimulate purchases of newly constructed homes as well as encouraging home ownership; the State of California has issued a (up to) $10,000 tax credit for homebuyers of new contruction properties.

Here are the details of the plan:

1) This credit only applies to new homes that will be used as a primary residence and is limited to the first 10,000 new home purchases.

2) The credit is for $10,000 or 5% of the home’s price, whichever is less.

3) There is no down payment requirement to receive the $10,000 tax credit.

4) There are no maximum income limitations so any buyer purchasing a new home can qualify.

5) The $10,000 tax credit is just that, a credit, not a loan, so if the home remains your primary residence for two years, you do not have to pay any portion of the tax credit back. If you sell the home in less than two years, then it has to be paid back at time of sale.

6) The new home cannot be located outside of the United States and it cannot be inherited property or a gift.